AI Partly Behind Recent Rise in Long-Dated Yields, ING Says

05:00 PM EDT, 10/01/2026 (MT Newswires) -- Artificial intelligence is partly behind a recent rise in long-dated yields as more companies opt to issue bonds to finance their capital spending plans, ING Bank said Thursday. US Treasury yields hit their highest level in more than two decades earlier on Thursday, CNBC reported. The yields reversed their direction later in the day, with the 10-year rate last seen down five basis points at 5.24% and the 30-year rate falling 2.8 basis points to 5.61%. Some 20% of the rise in long-end yields can be attributed to AI, ING said. Corporate bond issuance has reached $878 billion this year, eclipsing the full-year total in each year between 2021 and 2024, and 54% higher than the same period last year, according to ING. More than a third of this year's tally -- $330 billion -- accounts for issuances by the technology, media and telecom sector. AI-focused companies have chosen to issue bonds to raise the required capital with longer repayment periods than what would have been offered had they borrowed from banks, ING said. "Bank lending is up, but nowhere near the same scale of the increase in bond issuance," ING wrote. "So, either way, back ends are feeling more pressure than they would for long-dated funding." But AI isn't the only factor influencing long-dated rates. About half is attributable to worries around higher inflation driven by the surge in energy prices due to the Middle East conflict, the ING report showed. The brokerage sees a 30% influence from the fiscal deficit narrative. Last month, the Federal Reserve raised interest rates by 25 basis points, its first hike in just over three years, to combat sticky inflation. The central bank's so-called "dot plot" signaled that a further rate increase could happen later this year. Fed Vice Chair Philip Jefferson on Thursday expressed concern about higher energy prices fueling a persistent rise in inflation more broadly. Several Fed officials have made hawkish remarks following the central bank's monetary policy decision in September. "My view is that any future adjustments in policy should be determined by carefully examining trends in the data, the evolving outlook, and the balance of risks," Jefferson said in a speech at an event in Virginia. "Since our September meeting, yields across the term structure have increased further, a sign that investors are reassessing the evolving macroeconomic landscape. My colleagues and I will need to come to our own judgment, which may take more time."